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Crapitalism: Mo Money, Mo Problems

Haran Kumar, St. Louis, MO


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September 11th is a day that will live in infamy. On that day in 1973, Salvador Allende was murdered in cold blood. If he had been the democratically elected leader of Britain or Canada, his death would certainly have drawn international outcry and retaliation against the perpetrators. But, being the openly socialist president of Chile at the height of Cold War, no such response was warranted — at least not from the West. In a violent CIA-backed coup d’état, military dictator Augusto Pinochet took control of the country and proceeded to sell off state-run enterprises and dismantle trade regulations. Chile lost its world-class education and healthcare systems; unemployment increased by a factor of ten; and slums became commonplace. Horrible, right? Well, look on the bright side: American corporations would profit enormously over the coming decades.

Allende’s death was but one in a rather one-sided global struggle for the rights and welfare of people worldwide; one which continues to this day. This war is being waged not only with weapons but with large sums of money; not only by nation-states but by multinational corporations; not only with spite but also with greed. Researcher Natalie Goldstein defines this as neoliberalism, an ideology that promotes pervasive laissez-faire economics above all other societal issues, including social wellbeing. Capitalism, in its most pure state. When this philosophy is coupled with globalization, worldwide economic integration, it produces destructive consequences, as the policies introduced by Ronald Reagan and Margaret Thatcher, now implemented almost universally, have shown. Neoliberalism’s negative effects of environmental degradation, poverty, and structural violence outweigh any minor economic benefits its proponents claim.

Supporters of neoliberal globalization often claim that the current system is necessary for robust economic growth with which to improve the wellbeing of all. For instance, economics professor Archana Gaur notes that many developing nations have experienced growth above ten percent annually for decades. But who benefits? Almost no one. According to a 2014 report from international aid organization Oxfam, economic inequity has reached unprecedented levels. Today, a mere one percent of the world’s population controls 50 percent of the wealth, which is 65 times more than the wealth of the entire bottom 50 percent of the population. Considering the results it has produced, it is clear that the neoliberal system, full of greed and imbalance, only serves the hyper-wealthy, leaving the rest of the population out of luck. The other aspect of the argument is that there is a causal relationship between economic growth and poverty reduction. Dr. Gaur is not alone when she notes that economic growth has historically correlated with poverty reduction.

At the core of the problem that neoliberalism poses is the concept of tragedies of the commons, situations in which the needs of the public are not best served by the competing private interests encouraged by capitalism. Philosopher Slavoj Žižek notes that complex systems such as financial markets and genetic engineering and environment require centralized regulation to ensure that the general public benefits. Because neoliberalism is based on the false assumption that individual selfishness is critical for collective well being, it segregates morality from economics, making it an unethical system for economic governance. The issue is that placing elites in power and encouraging them to increase their own well being is counterproductive to the goals of the general public. As scholar and cultural critic Henry Giroux put it: neoliberalism’s “survival of the fittest” mentality celebrates “self interests over social needs” and “profit-making as the essence of democracy.”

In practice, this fundamental flaw has produced unprecedented ecological devastation. One example is the competition between multinational agricultural corporations and local farmers in the developing world. Agriculture expert and activist Vandana Shiva notes that neoliberalism has shifted global food production from “small biodiverse farms” to “large, industrial monocultures” which put small farmers out of business, deplete ecological diversity, and kill pollinating species. This hurts both the environment itself and the people which it supports. Another example is mining, where nature is destroyed in order to extract commodities to be converted into material wealth.

However, potentially the most disastrous example of neoliberal destruction is global climate change. According to the Intergovernmental Panel on Climate Change, a body made up of the world’s leading climate experts, there is unequivocal evidence that anthropogenic emissions are causing unprecedented environmental changes — atmospheric and oceanic temperature rises, sea level rise, volatile weather, and extreme natural disasters— that will undermine food security, exacerbate health problems, and increase poverty. The cause? You guessed it: neoliberalism. The IPCC concludes that emissions are a direct result of the Industrial Revolution and its continuation today, a result of the capitalistic greed for wealth and increased production. Ultimately, capitalist greed lacks the foresight to consider the long term consequences of its actions and the broad ramifications outside the sphere of finance. As a result, neoliberalism has both caused and failed to prevent the death of all of humanity.

On a more individual level, neoliberalism is responsible for another human crisis, structural violence against marginalized groups. The group most affected by neoliberalism is the global poor, worked to death in sweatshops to produce products for wealthier nations. For instance, the conditions that garment workers in Central America and the Caribbean face include: over hundred-hour work weeks, without sick leave or holidays; less than two dollars to take back daily to their families; military-like security to stop unions, protests, and safety inspections.. Neoliberal institutions reinstate colonial dominance of the impoverished world, producing millions of “quasi-slaves”, developing nations have large “classes of low skilled, usually uneducated, workers employed at very low wages”. As a result of this, corporations can dictate public policy, primarily in underdeveloped nations, reducing the political agency of citizens through fiscal totalitarianism. Thus, neoliberalism reduces both the standard of living in developing nations and removes their ability to uplift themselves from poverty.

A common justification for neoliberalism is that it is humanity’s only option. In other words, the lack of a viable alternative makes capitalism acceptable: practical necessity trumps morality. On first glance, this would appear to be the case: the most “successful” nations in the world are capitalist, communist nations have turned into statist capitalist regimes, and socialism seems to have fizzled out. However, this argument is incorrect because the massive harms of neoliberalism in the status quo vastly exceed any consequences of a shift away from it. Pervasive institutionalized genocide outweighs a decrease in economic productivity that would result from ending neoliberalism. Secondly, the claim is patently false. University of Massachusetts Amherst Professor Richard D. Wolff notes that there are a wide variety of systems with which to replace neoliberalism, including essentially any system in which surplus is distributed to its producers rather than an elite few. One such example is worker self-directed enterprises, in which the workers themselves, rather than a board of directors or shareholders, operate and receive profit from their business. Another solution, the Nordic Model, involving strict regulations on businesses, a universal welfare state, and full democracy, is currently in practice in Scandinavia.

In the absence of neoliberalism, strict environmental protections such as a carbon tax and pollution inspections would address ecological damage; a robust welfare system would alleviate issues of poverty; trade barriers would reduce the neocolonialism; and the remaining free market could provide economic growth and innovation. Reining in capitalism and transitioning away from neoliberalism would be sufficient to prevent most of its devastating effects. The simple fact is that there are many alternatives to needless violence and suffering.

The fate of society is in dire straits under its current neoliberal system of governance. Neoliberalism is the lighter of capitalism’s fire; globalization, the torch bearer. At the heart of the issue is a refusal to acknowledge that there is a pervasive problem in the global order. But to toil endlessly, to produce capital for others, and then to die — such should not be, and cannot become, the nature of human existence. People must refuse to accept the inevitability of capitalism, and instead embrace a more open-minded viewpoint. This must begin with a restructuring of critical pedagogy that shifts education away from mindless brainwashing to training in critical thinking. Every single individual must question the role they play in the neoliberal system, as consumers and laborers; teachers and students; leaders and followers. In particular, we Americans must question our role as the first world beneficiaries — and thus enablers— of global neoliberal exploitation of the vulnerable. As President Bush said after America’s own September 11th disaster: we must “unite in our resolve for justice and peace.”

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